Abuelo’s filed a proposed reorganization plan in bankruptcy court putting new board leadership and ownership in place. If approved, it also wipes out the value previous owners had.
- Restructures roughly $8 million of loans (all from the same bank) into a single 10-year note at 7 percent interest
- Pays back secured creditors (or gives them options for recovering their full value)
- Pays back only a portion to unsecured creditors
- Gives Abuelo’s the right to keep or reject existing contracts
The plan still needs final approval after creditors get a chance to review the plan and vote. The exact timing was not yet listed in court records, but Bankruptcy Judge Edward Morris in Fort Worth previously gave Abuelo’s the exclusive right to present a plan until April 30 – meaning no one else can solicit votes for an alternative or competing plan until then.
Abuelo’s, a full-service casual dining restaurant chain based in Lubbock, filed for bankruptcy in September with a little more than $31 million in assets and just less than $31 million in liabilities. The chain continues to operate during the bankruptcy.
The company operated 16 restaurants nationwide when the bankruptcy was first filed, court records said. At one point, Abuelo’s had as many as 40 locations…